Blog outlining massive fraud in the Australian listed investment company (LIC) and broader financial sector

Tuesday, 9 September 2014

The Panorama Synergy ramp

Panorama Synergy (PSY.AX) is a listed securities fraud with links to corrupt politicians and convicted share manipulators. After issuing 347m shares at $0.003 in October 2013, bringing total number of outstanding shares to 474m, Panorama Synergy was ramped to $0.46 in sharply delineated steps over the next few months. This 15,000% ramp brought the company's "market" cap to $218m in September 2014. Before raising capital, Panorama Synergy had a net asset deficiency of $400K.

Purportedly a technology company, Panorama has had negative earnings and cash flows for the past ten years. According to its latest annual report, Panorama Synergy's assets comprise of $1.2m in newly raised cash and a licensing agreement with the University of Western Australia (UWA) for certain microelectromechanical devices. Although Panorama regularly uses misleading phrases such "the company's patented technology", Panorama does not actually own these patents, rather UWA does.

The purported basis for Panorama's "market" cap of $218m is a five-year licensing agreement with UWA, entered into in January 2014. Assuming that Panorama is not a blatantly manipulated listed fraud (which it is), the market value of this licensing agreement is therefore close to $218m. The natural question is then how much Panorama paid for this priceless licensing agreement? If UWA did not receive fair compensation for this invaluable licensing agreement, but rather gave it to a related party at lower than its market value, then UWA officials are guilty of fraud.

The Karam family has had previous business dealings with the Obeid crime family, as shown by ICAC hearings, although they later had a falling out over the botched Australian Water Holdings scam. (CORRECTION: This post originally and incorrectly stated that the company secretary of Panorama Synergy testified for ICAC. This is a different Anthony Karam.) Another director, Jeff Braysich, was convicted of share manipulation in 2007. The conviction was later overturned on a technicality. The scheme Braysich was convicted of used wash trades, i.e. sham trades between related parties, to fake market prices. Such wash trades could, for example, be used for ramps.

I only started following your blog a few days ago and it appears to be at the perfect time.

I’m one of the guys behind marketindex.com.au and therefore have lots of data to “play” with in my spare time. PSY came up on my radar recently due to its significant returns (in fact it stood out like a sore thumb on my spreadsheet) so I investigated further.

My humble opinion…“...blatantly manipulated listed fraud” - I don’t think so.- A company doing $10m+ daily turnover and with no change in the top 20 shareholders who hold 60%< of the company … I think it’s not manipulation, but instead speculation being the driver. Other ASX listed companies like BCT (probably on the back of PSY) and AKP have seen similar (less noteworthy) spikes. The whole MEMS/IOT niche is seeing rapid growth. Bubble? Who knows, but “manipulated fraud” is a big call.

The current market cap certainly does ring alarm bells and can’t be justified by any fundamental ratio, but technology stocks never follow the fundamental norm. Potential and projections are what matter.

Before presuming something is dirty, I always take the perspective that maybe there is something I don’t know about (although you provided some great background checks). I’m very computer savvy but even the enormity of the MEMS and “Internet of Things” niche sends my mind in circles at times.

Anyway, it was a great read. You provide great links to references and don’t just shout your opinion like many others (which I have just done!).

PS: “Inside Bid” - you can use a blog reader to get all your favourite blogs in one spot. They also notify you when a new post is released.

So it was an amazing coincidence the fantastic news and ludicrously unnatural staircase ramp came directly after a hail-mary 350m share issuing? And did UWA just gift PSY a licensing agreement actually worth hundreds of millions of dollars? If you are right, then the UWA officials defrauded their university of hundreds of millions, and have some serious questions to answer.

"So it was an amazing coincidence the fantastic news and ludicrously unnatural staircase ramp came directly after a hail-mary 350m share issuing?" - Or the capital raising was done so the company could stay afloat until they could complete what ever they were working on, which just so happens to appear to work.

"And did UWA just gift PSY a licensing agreement actually worth hundreds of millions of dollars?" I wouldn't classify receiving a minimum 50% of all revenue through licensing what ever PSY develop a "gift".

And maybe UWA thought they wouldn't be able to realise the full potential of whatever it is they're working on, and thought PSY could achieve it (the CEO would be very well connected being ex-CEO of Cisco Canada).

...actually worth hundreds of millions of dollars?" It wasn't valued at hundreds of millions of dollars at the time. UWA probably thought the technology would fail. It's probably only "valued" at that much now by a lot of speculators who don't care about the fundamentals and are just cowboys.

So you're are saying that it was just an amazing coincidence that all this great news and investor interest came after PSY, approaching collapse, issued 350m shares at $0.003?

And you are saying that the obvious staircase-shaped ramp actually is the result of market forces, and it's just an amazing coincidence it looks like that? People just happened to buy in a staircase pattern?

And you are saying the market value of PSY's licensing agreement is hundreds of millions of dollars? But this valuation is wrong and done by cowboys with no regard to fundamentals?

The company has return on total asset (ROA) of (67.18) % which means that it has lost $67.18 on every $100 spent on asset. This is way below average. Similarly, it shows return on equity (ROE) of (150.69) % meaning that it generated substantial loss on money invested by shareholders.

Yep, sure sounds like a legit company that should be up 15,000% based on technology the UWA thought would fail.

The ludicrous staircase ramp of PSY was as obviously fraudulent as a Nigerian 419 scam. But similarly to a 419 scam, if the PSY criminals market this to a thousand people, inevitable one schmuck like Sam will bite. And just like with a 419 scam, if you try to tell the victims they have been conned, they not only won't believe you, but will curse you and tell you to get lost.

Yeah, those totally legit "institutional investors"... I wonder what their average cost of share is.. Thanks for reading and commenting, CS. Did you notice that the ramp/capitalraising of PSY was handled by the same outfit (Patersons) that handled CNX?

Patersons is a dodgy WA stock broker that regularly engages in share manipulation in conjunction with capital raisings, with a plant inside Sydney Morning Herald that goes by the moniker "Honest" Marcus.. (yes, seriously)

I am very interested to read your views on PSY. There is another company by the name of Energi Ltd (ERJ) that has recently signed a collaborative development agreement with PSY. I was an investor in ERJ many years ago because I was interested in their Opcom Powerbox which create power from waste heat from industrial processes. ERJ however (which for me was never anything more than a small speculative investment) turned out to be a bit of a dud, with annual share price falls that would make your eyes water and which were made worse by dilution due to never ending capital raisings. In the last year the share price went as low as 0.005. Then from January 2015 the share price started to mysteriously rise to as high as 0.087. It has recently had a pull back though to 0.047 (which still equates to a 571% share price rise over 12 months). This to my mind has all the signs of a classic 'pump and dump'. In this regard, there has been much promotion of ERJ on sites like Hotcopper. So I was wondering in light of the recent PSY / ERJ collaborative announcement if the same players might be involved. Dr Benway, I'd be interested in your thoughts on this.

Hi Inquisitive, thanks for posting this, very interesting indeed. I had a look at both ERJ and its associated Swedish company Opcon AB. There are numerous red flashing signs here, both have the classic hallmarks of listed securities fraud.

1. Long-term catastrophic shareholder destruction interspersed with mysterious ramps engineered by and for the benefit of insiders.

2. Exponential increase in shares outstanding, and a focus on listings and share issuance instead of any actual operations.

4. Lack of profitable operations with truly independent third parties, instead replaced by various related party transactions and deals.

5. Involvement with insider investment companies, with which various special financing deals are made, in effect creating a separate class of shareholder with special privileges.

6. The spruiking of some magic bean technology, the fantastic profits of which are always just around the next corner of capital raising.

7. Various crossholdings and joint ventures with related parties propping up the books.

The true business of these companies are not the sale of the "opcon powerbox", rather their true business is spruiking shares and fraud. The sale of "opcon powerboxes" is just a pretext, a pretense, a beard, the distraction of the magician's wand. It is overwhelmingly likely that the same investment cartel now is using both PSY and ERJ, and that the PSY criminals were involved with the 10X ramp of ERJ in 2015.

In general, "clean energy" has become a prime sector for securities fraud in Australia, with an increasing number of such companies being outright scams. The clean energy sector is good for magic bean stories, it can get government grants and handouts, the listed players are small and their shares manipulable. Importantly, clean energy frauds need show no current profits or even operations.